Correlation Between Chung Hsin and PChome Online
Can any of the company-specific risk be diversified away by investing in both Chung Hsin and PChome Online at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Chung Hsin and PChome Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chung Hsin Electric Machinery and PChome Online, you can compare the effects of market volatilities on Chung Hsin and PChome Online and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Chung Hsin with a short position of PChome Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chung Hsin and PChome Online.
Diversification Opportunities for Chung Hsin and PChome Online
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chung and PChome is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Chung Hsin Electric Machinery and PChome Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PChome Online and Chung Hsin is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Chung Hsin Electric Machinery are associated (or correlated) with PChome Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PChome Online has no effect on the direction of Chung Hsin i.e., Chung Hsin and PChome Online go up and down completely randomly.
Pair Corralation between Chung Hsin and PChome Online
Assuming the 90 days trading horizon Chung Hsin Electric Machinery is expected to generate 1.1 times more return on investment than PChome Online. However, Chung Hsin is 1.1 times more volatile than PChome Online. It trades about 0.06 of its potential returns per unit of risk. PChome Online is currently generating about -0.02 per unit of risk. If you would invest 7,810 in Chung Hsin Electric Machinery on October 25, 2024 and sell it today you would earn a total of 7,690 from holding Chung Hsin Electric Machinery or generate 98.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chung Hsin Electric Machinery vs. PChome Online
Performance |
| Timeline |
| Chung Hsin Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PChome Online |
Chung Hsin and PChome Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chung Hsin and PChome Online
The main advantage of trading using opposite Chung Hsin and PChome Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chung Hsin position performs unexpectedly, PChome Online can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PChome Online will offset losses from the drop in PChome Online's long position.| Chung Hsin vs. Fortune Electric Co | Chung Hsin vs. Taiwan Cement Corp | Chung Hsin vs. Walsin Lihwa Corp | Chung Hsin vs. Great Wall Enterprise |
| PChome Online vs. momo Inc | PChome Online vs. President Chain Store | PChome Online vs. Uni President Enterprises Corp | PChome Online vs. Taiwan FamilyMart Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the CEOs Directory module to screen CEOs from public companies around the world.
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